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“EEOC suit against Honeywell could have far reaching ramifications”

When the Equal Employment Opportunity Commission (EEOC) sued Honeywell Inc. in October over the company’s wellness program, it had many legal experts scratching their heads.

The wellness plan Honeywell offers to its employees is pretty typical of most plans offered within corporate America. But according to the EEOC’s suit, filed in a Minneapolis court on Oct. 27, one of the plan’s requirements violates both the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA).

The wellness plan requires that Honeywell employees and their covered spouses participate in blood and medical tests that could identify smoking, diabetes, high blood pressure, obesity and various other health problems in individuals. If employees and spouses don’t participate in the tests, Honeywell may penalize them to the tune of as much as $4,000—including a $1,500 loss in company contributions to health savings accounts, a $500 medical plan surcharge, and $1,000 tobacco surcharges each if both the employee and spouse are smokers.

According to the EEOC, this all boils down to violations of the ADA and GINA. Under the ADA, employers may only gather this type of medical information in limited circumstances—one of which is employees’ “voluntary” participation in health risk assessments undertaken in conjunction with a wellness plan. In this case, it appears the EEOC is rendering Honeywell’s wellness plan testing as “involuntarily” because of the financial penalties imposed on those who refuse to participate. As for GINA, the commission also asserts that the information gathered on spouses is “genetic information” as defined under that Act, and that Honeywell violates GINA when it gathers this information.

Honeywell disputes all of these claims, saying it’s merely trying to encourage a healthier lifestyle for its employees and their families. The judge in the lawsuit initially sided with Honeywell, denying the EEOC’s request for an injunction. However, the judge pointed out that the decision did not reach the ultimate merits of the EEOC’s claim.

So what happens next? That remains to be seen. But employers with similar plans, facing similar suits should consider their defenses. For example, an employer doesn’t violate the ADA’s “no medical examination” rule if the medical examination is done to “underwrite,” “classify” or “administer” medical risks. An employer may also argue that its program doesn’t violate the ADA under the “voluntary” wellness program exception. While the EEOC has acknowledged these exceptions exist, it has generally taken a narrow reading of the exceptions.

The timing of the lawsuit may be problematic for employers, many of whom are in the middle of open enrollment and, often, conducting their own health risk assessments. Our counsel: Employers should quickly review the lawsuit and strategize on how best to minimize their risks.